Greg Davies: Focus on the spirit of risk regulation

Assessing suitability

clock • 4 min read

A focus on the spirit rather than the letter of the law should ensure regulatory requirements are met as a side-effect of following processes designed for other purposes, argues Greg Davies

The spirit of financial advisory regulations is clear: to protect clients from bad investments, from unscrupulous salesmen, and from themselves. They aim to increase a client's comfort and confidence with investing - to arm them with a greater understanding of what they are investing in, and why. Comfort and confidence are emotional states, triggered by internal traits colliding with external circumstances. And you do not manage that by looking through a limited, letter-of-the-law lens. A focus on the letter of the law can leave advisers feeling like they are playing a constant game of c...

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